Time to Reassess and Fine-tune, not Abandon, the Green Communities Act

Much has been made on both sides of the green energy debate about Attorney General Martha Coakley’s testimony at a recent legislative hearing on the Green Communities Act. Her testimony was the most objective and comprehensive examination of the energy policies and activities in the state among all of the speakers of the day. She delivered a simple plea for introspection and assessment before the state claims resounding success and continuation. My take away, two words: “reassess” and “fine-tune.”

Some defenders of the Green Communities Act, the state’s unprecedented investment in energy efficiency and renewable resources, have criticized the Attorney General’s comments for being anti-environment and somehow unfaithful to the green vision. Long-term opponents of these policies took comfort in the comments raising questions about the picture of success painted by the authors and implementers of the Green Communities Act.

But no one should take either umbrage or solace from her testimony. She was simply being logical and prudent. Any enterprise which spends the kind of money Massachusetts is spending on these resources should ensure the objectives are not only being met but are still relevant and worth the cost.
At the same time, we must not undermine the successful strategies by pulling the plug too soon or creating so much uncertainty that the market collapses before we can capture the value for the money already spent. I am thinking here of the solar carve-out or SREC program as part of the Renewable Energy Portfolio Standard. While the Attorney General’s proposal was that policies be technology neutral, the solar program is one that otherwise meets her objectives of transparency and competition and it clearly is producing jobs.

Last Spring, PowerOptions issued a Request for Qualifications for a solar program which will bring cleaner energy options to nonprofit institutions around the state under the most favorable terms and prices available. We received 15 proposals from developers from all over the country. The competition for the development of projects is fierce, and few customers are choosing vendors without some kind of competitive solicitation. As is well documented by the failures of solar panel manufacturers, panel prices are plummeting and those cost reductions are being reflected in the purchased power price quotes to customers.

The solar business in Massachusetts is flourishing, with over 200 companies in the state today. The vendors we’re working with are hiring people quickly to ramp up to meet the demand. For the customers who are able to benefit directly from these projects, the electricity prices are favorable compared to their delivered cost of power. Admittedly, the SREC and tax benefits make these projects possible, but the rate impact shared by all customers is small compared to the overall cost of the electricity.

Unlike some others, I do not think that all customers benefit greatly from the development of solar across the state. A couple of hundred megawatts of solar displace very little, if any, fossil fuel in the regional power pool. Further, until these resources are fully reflected in regional planning and procurement, they are not providing any benefit to other customers. Lastly, we must remember that the energy dispatch benefits that come from our strategies here in Massachusetts get shared across New England, and we really only get about 50 percent of them.

So, why do solar at all?

In the near term, there is a clear economic development benefit from this wave hitting the state. Not only are jobs being created to build the projects but large institutions, particularly the universities, hospitals and municipalities PowerOptions serves, are prime beneficiaries of these projects. They are core industries in the state and their success in developing solar projects provides substantial economic benefit to all ratepayers and taxpayers. To the extent that they save money, they are able to retain or expand staff, reinvest in infrastructure and reduce the burden on taxpayers, students and patients.

So, yes, we need to look beyond the theories and assumptions of our energy policy and make sure it all makes sense. But we also have to be careful to not undermine the clear value of what we’ve started.